You should put away 10% of your income for retirement. Then invest it. MarksJarvis says that a lot of people are good savers and “absolutely terrible investors.”

2. Diversify your portfolio

You can have too much invested in stocks. Here’s the rule that MarksJarvis recommends: Take the number 100, subtract your age, and the difference is the amount you should invest in stocks. Here’s an example: If you are 30, subtract that from 100. You should be 70% in stocks, 30% in bonds. As you get closer to retirement, you’ll have more of your nest egg in safer investments like bonds.

3. Be disciplined with your spending

Find a way to save $20 every week. Look at your checkbook or bank statement. What have you been spending money on that you don’t need? MarksJarvis swears you can find impulse newstand purchases that went unread, clothes that you never wear, and dinners out that could have been home cooked meals. Cut out that spending and put that money aside.

4. Know how much you actually need to retire

You need roughly your final salary multiplied by 12 to maintain your standard of living. If you are far from retirement and can’t imagine your final salary, MarksJarvis recommends the Ballpark Estimate calculator.

About the blogger

Stephanie Curtis has produced events, daily news shows, documentaries, conferences and call-ins for MPR News. She also was among the pioneering producers who launched The Current. You can hear her discuss movies every Thursday on The Cube Critics.

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One of the problems in trying to use the calculators like Ballpark Estimate calculator is that they ask for your current or final salary. I put about 1/3 of my current salary into a 401 K. I don’t need to retire on my current salary but on my current take home pay. A big difference. The problem is that you have to also know how much taxes you would have to pay on withdrawals from your 401 K to know how much you will have left to live on. The calculators don’t work. They overestimate your needs because they don’t take subtractions from your salary into account.

Stephanie

Tom,

I know. There are no clear answers. It would also help to know how long I’ll need money. ( But do I really want to know my date of death? Probably not.)